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2022 (10) TMI 82 - AT - Income TaxDenial of deduction u/s 80IAB - income received in the nature of car parking rental - as submitted provision of car parking services is essential part of carrying out the business of development, operation and maintenance of SEZ - HELD THAT:- As carefully examined the issue and perused the orders of the lower authorities. In the light of documentary evidences placed by way of notifications and instructions from competent authorities, it is manifest that car parking rentals have been reckoned as authorized operation in SEZ. In the light of express guidelines issued by the Government as referred to and relied upon, we are of the view that the income from car parking rental would squarely qualify for deduction under Section 80IAB of the Act. Ground of the appeal of the assessee is allowed. Deduction u/s 80IAB on sale of garbage and oil waste - HELD THAT:- We take note of the similar contentions on behalf of the assessee that generation of waste oil and garbage are inextricably connected to the maintenance and running of a SEZ and thus any profit derived from sale of such scrap will be eligible for deduction under Section 80IAB of the Act. A reference made in this regard in the case of ACIT vs. Zydus Infrastructure [2016 (8) TMI 696 - ITAT AHMEDABAD] has been taken note of. We thus agree with the plea of the assessee on this score too. Ground No.2 of the Assessee is thus allowed. Disallowance u/s 14A - suo motu disallowance made by assessee - HELD THAT:- We find merit in the plea of the assessee that the disallowance cannot exceed the actual expenditure incurred in relation to the earning of the exempt income. In the instant case, no direct expenses has been incurred and the disallowance has been carried out under Rule 8D(2)(iii) of the Rules in respect of indirect expenses. The disallowance has been carried out at Rs.22,99,529/- (being 0.5% of the average value of investments) in place of the disallowance offered amounting to Rs.5,45,306/-. The action of the Assessing Officer is apparently without application of mind inasmuch as the actual indirect expenditure available for allocation is Rs.5,45,306/- only. Other expenses incurred are stated to be directly attributable to SEZ operation and thus cannot be subjected to estimated disallowance qua be exempt income. We thus find merit in the plea of the assessee. The Assessing Officer is directed to restore the position claimed by the assessee in this regard. Assessee ground allowed.
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